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Mean Reversal Bands

This indicator can be used to get entries when crossing inwards from the outer bands.

The center line can also be used as a baseline/trend direction.

Parameters:

Parameter  Default value  Options 
Base period   100  Any number of bars
Applied Price   Close  The price to use for calculation of the channel
Multiplier for outer band   2.5  The multiplier for calculating the outer bands
Multiplier for inner band   1.5  The multiplier for calculating the inner bands
Period for smoothing the True Average for the Bands   100  Any number of bars (Usually same as 

For short entries:

When the high price is above the outer band and closes inside the outer band, you should look for short entries.

For long entries:

When the low price is below the outer band and closes inside the outer band, you should look for long entries.


The outer band is the most conservative option, and it does not give many entries. For more entries, use the inner band, however that might give some false entries.


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